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Canada Policy Interest Rate 4.75% (consensus 4.75%) in Jun-24

• The Bank of Canada reduced its policy interest rate by 25 basis points to 4.75%, aligning with the economic consensus, driven by increased confidence in achieving the 2% inflation target.
• Economic growth resumed in Canada with a 1.7% GDP increase in Q1 2024, while CPI inflation eased to 2.7%, supported by declining core inflation measures and narrower price increase breadth across CPI components.
• The Bank will closely monitor core inflation, demand-supply balance, and wage dynamics, with the potential for further rate cuts if inflation continues to ease and confidence in reaching the 2% target solidifies, balanced against the risk of prematurely loosening monetary policy.

Canada CPI Inflation 2.69% y-o-y (consensus 2.7%) in Apr-24

- Canada's CPI inflation in April 2024 resumed its trend decline to 2.69% year-on-year, broadly as the consensus expected.
- The core CPI, which excludes volatile components, dropped below target by printing at 1.6% year-on-year in April 2024, suggesting moderate underlying inflation.

Canada Unemployment Rate 6.1% (consensus 6.2%) in Apr-24

- Canada's unemployment rate remained steady at 6.1% in Apr-24, contrary to consensus expectations for another rise to 6.2%.
- The unemployment rate has been trending higher over the past year, but the employment level surged by 90.4k in April.

Canada CPI Inflation 2.9% y-o-y (consensus 2.9%) in Mar-24

- Canada's annual CPI inflation rate in March 2024 crept up to 2.9%, in line with market expectations, returning to the highest growth since December 2023.
- However, disinflation has left the current rate 0.42 percentage points below the one-year average while core measures kept slowing and to a surprising extent.